This credit card company had made a major customer portfolio acquisition – and needed to establish a procurement function to support it. That meant starting from scratch with this new business – although it also called for fast project delivery to get the acquisition up and running with business-as-usual practices in short order.
The “greenfield” nature of the project offered huge opportunities to embed a strategic procurement mind-set from the start – with no baggage and no systems or processes to redesign. But as a mass-market financial services business, there were two huge additional challenges: regulation and innovation. The payments world is changing fast, so the business needed to stay on top of developments in the wider market. And any gaps in the supply eco-system could potentially open the business to censure, fines, catastrophic PR and even prosecution.
Proxima’s first task was to layer our team’s existing experience in financial services to the particular requirements of this business – and particularly its risk profile and regulatory needs. Because there was no existing procurement function, and as a third party outsourcing partner, the team could quickly make links across different functions to develop a holistic view of operations, needs and opportunities.
We were able to build each pillar of our approach cleanly, too – implementing best-in-class supplier performance management tools, for example, as an Enabler of a strategic procurement mind-set. Then by applying industry best practice, the business’s own talent and Proxima’s supplier database tools, it was relatively straightforward to embed real Mastery in every aspect of supplier relationships.
And because suppliers were treated as strategic partners from day one, they saw the value of bringing innovative approaches – both in supply arrangements and product propositions – to the business.
In highly regulated businesses, visibility through the supply chain is vital. (It’s important in any organization, of course, but the consequences of being blind-sided in financial services are that much higher.) Proxima’s highly integrated, holistic approach delivered that transparency.
Crucially, that wasn’t just for “beyond the fence” supplier activities. The team’s holistic approach to business challenges and the embedding of a strategic procurement mind-set across teams meant there was real transparency about the effect of the supply eco-system within the business, too. That has boosted innovation and openness to new ideas.
But while Proxima's approach places an emphasis squarely on the additional value of a strategic approach to supply, it’s rare that it doesn’t also deliver considerable cost savings as a by-product. This business was no exception. Smarter systems and a more disciplined approach to supplier relationships delivered best-in-class costs and terms – and minimized contractual claw-back through variances or admin issues.